When a church split spills into the street and the parties decide to hire counsel and resolve it in court, there can be consequences beyond wounded feelings that do not soon abate. It is possible that overly aggressive seizures of control, even usurpation by fraudulent means, can lead to court imposed penalties or restrictions authorized under state corporations statutes.
In Sikh Temple Turlock v Chahal, Slip Op. (Unpublished) (CA App. 5th, 2018), the church split, which involved a violent altercation at one point, resulted in competing church boards between which the trial court had to choose. The trial court determined that the latter of the two boards “fraudulently” took authority over the church and reinstated the prior board. In addition, the “usurpers” were barred from sitting on the church board for five years. The court of appeals affirmed. The appellate court viewed the five year bar as a reasonable action authorized by the state corporations statute and a good “cooling off period.” The court also noted that the invalid election upon which the challengers were relying never happened. However, it was deemed not valid because there was no documentation of a valid membership list as there was for the earlier election and thus no proof there had been a quorum.
Reading between the lines of the opinion, the church seemed to be suffering from antipathy of the congregation toward serving on the board. Also, the long serving, and maybe long suffering, valid board members may have become insufficiently motivated to keep current membership lists and to require the congregation to adhere to the bylaws regarding governance. This may have created the chaotic opening that resulted in competing boards, the latter of which tried to lock out the earlier in what the trial court viewed as a “fraudulent” usurpation. The lessons seem obvious.
Local churches governed by the congregation, even if they are also a member of a denomination, are generally either associations or corporations. If they are associations, the only governance question is whether there was a vote of the eligible voting members and the result. Neutral Principles generally allow courts to referee those elections. Also, incorporated churches typically have bylaws or statutory corporate governance rules to follow. Neutral Principles generally allow courts to referee those elections. Once the eligible voting membership casts ballots and a decision is reached, the courts typically fell comfortable enforcing those decision.
In Pule v Macomber, Slip Op. (D. Ha., 2018), the church split spilled into the street and at least one side allegedly enlisted the local police department. The Plaintiffs alleged they were locked out and threatened with charges of trespassing. The Plaintiffs allegedly tried to amend the bylaws to extend their two year terms as officers of the church until the litigation was concluded. A court could probably decide the validity of the amendment under Neutral Principles. The Plaintiffs alleged that the private citizen defendants conspired with the non-party local police to violate their civil rights. The claims survived a Motion to Dismiss and the conspiracy claim, even though the police and police agency were not named defendants, was sufficient for federal question jurisdiction in federal court. How the case may ultimately conclude may still be years in the future.
Generally, if a court will decide which side was elected to office, which can be a messy business as has been seen in other cases reported herein, the prevailing faction’s decisions are implicitly validated. That decision will turn on the language of the bylaws, the documentation of elections compliant with the bylaws, and the documentation of congregational voting. One of the decisions generally validated is the hiring or termination of clergy. Clergy employment decisions are typically out of reach as required by the Ministerial Exception Doctrine. But, once the officers have been confirmed in office and identity, the employment issue is usually rendered moot.
Church boards are called by a plethora of names and titles. Some of the names and titles are derived from scripture, some from state statutes, and some from old traditions no longer followed. Generally, churches do not call their board a “board of directors,” partly because of the history of church corporation statutes in some states, and sometimes to avoid business or commercial trappings. Regardless of the name or title, church boards derive their authority from foundational documents. Usually local church corporate bylaws at the least define the power and authority of the board(s) but denominational foundational documents can also limit a local church board’s reach or require prerequisites to the exercise of authority.
Usually, a single board member can do little or nothing. In the past, a small church by statute might have only a single trustee (or whatever name or title is given) authorized to transact the church business. But, in the more modern era corporate church bylaws usually require three trustees or more to transact business.
In Burns v Kingdom Impact Global Ministries, Inc., Slip Op. (NC App. 2017), one faction tried to withdraw the church from the denomination and then ousted the faction that tried to stay with the denomination. The faction leading the withdrawal charge tried to merge a new corporation with the existing church corporation and “merge it out of existence.” A trustee of the “merged” corporation was called upon to transfer real estate titles from the original church corporation to the “merged” surviving church corporation. Some, and maybe all, of the board members of the original church corporation, and members of the ousted faction, sued the “merged” surviving corporation and alleged the sole trustee that signed the “merger” documents and the transfers of property titles did not have sufficient authority to do so. The trial court and the appellate court agreed.
The corporate “merger” may have been an attempt to strip the denominational exclusivity language from the bylaws and to achieve withdrawal from the denomination. The effort failed because the records of the congregational votes taken to authorize these actions seemed dubious to the court. Also, the trustees that had authority to transact the church’s business did not authorize the transactions and the sole trustee that acted did not have sufficient authority to act alone. One of the properties sought to be transferred contained a restrictive title covenant that the “merged” corporation could not meet because it was never affiliated with the denomination. In any event, this was nearly an ignominious end for a seventy year old church.
One other lesson seems to be that churches should probably update their property titles and bylaws periodically, probably every decade, and employ competent counsel to assist. Another would be that concentration of authority may be needed in a new church work but should be wielded by a church board acting as a collegium as soon as the church is mature enough to own real property.